Multichain

Bridging

Multichain is a cross-chain liquidity router (bridge) that lets anyone bridge assets from one blockchain to another.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Enables the transfer of a wide range of crypto assets across blockchains with some of the cheapest bridging fees. Offers both a cross-chain bridge and router system using liquidity pools.
What we like less
Requires more trust assumptions as the protocol's consensus mechanism relies on extrernal, trusted validators. Malicious actions can result in loss of user funds.
What it means for you
Multichain offers you a significant amount of tokens and blockchain networks that competitive bridges struggle to compete with and is backed by trusted industry leaders and top VC firms.
Information
Exploit/Hacks
Several
Info
  • Website
  • Token: MULTI
  • Tags: Bridging
Key Metrics
  • TVL: $194M (Rank #55)
  • TVL Ranking by Bridging: #0
  • Blockchain: Ethereum, Binance, Fantom, Polygon, Klaytn, Arbitrum, Avalanche, Optimism, Heco, Cronos, Harmony, Polygon zkEVM, Syscoin, Kardia, Kucoin, Velas, Arbitrum Nova, Dogechain, Fusion, Celo, Moonbeam, DFK, Moonriver, Fuse, OKExChain, Shiden, IoTeX, Kava, Bittorrent, EthereumClassic, Metis, xDai, Milkomeda, Telos, Aurora, Cube, Boba, TomoChain, Hoo, REI, OntologyEVM, EthereumPoW, smartBCH, ThunderCore, Milkomeda A1, Ronin, Evmos, Astar, RSK, Oasis, Conflux, Bitgert, GodwokenV1, CLV
  • Chain TVL
    • Ethereum: $118.94M
    • Binance: $54.66M
    • Fantom: $6.55M
    • Polygon: $5.65M
    • Klaytn: $2.09M
    • Others: $6.14M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by several experienced auditors including Trail of Bits and PeckShield
  • Public team promotes accountability
  • Several documented protocol hacks
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 1% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of at least 4 signers, which means the protocol is less susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Externally verified bridge system that is reliant on an external set of validators who don`t have to post any collateral; users essentially have to put their trust in the reputation that all validators will act honestly
  • Bridge messages are validated by an external third-party that usually comprises a limited multisig
  • Multichain is the largest cross-chain bridge
Things to know about Multichain

How Multichain works

The Multichain bridge network consists of Secure Multi Party Computation (SMPC) nodes which are external to any blockchains and collectively sign transactions. The group of nodes are run by trusted orgnaizations, institutions and individuals who must sign collectively with each only knowing a part of the key. Multichain uses a lock-and-mint mechanism to bridge assets from one chain to another. This is achieved by locking an asset in a smart contract on the source chain and then minting a corresponding wrapped asset on the destination chain. The revese process involves the user sending the wrapped asset from the destination chain back to the source chain; in this case, the wrapped asset is burned and the assets locked in the smart contract are released on the source chain. Multichain also offers a router that facilitates cross-chain transfers with reduced costs; it allows users to swap both native and bridged assets (created by a third-party native bridge). To enable the transfer of native assets across different chains, Multichain uses liquidity pools. These liquidity pools are created on different blockchains where the native tokens are added to the pool by liquidity providers. Once added, these tokens become available to be used for cross-chain transfers.

How Multichain makes money

Multichain collects bridging fees that vary depending on the underlying asset. Altcoins incur a cross-chain fee of 0.1%, while blue-chip assets including stablecoins incur a fee of 0.1% when bridged to ETH and only $0.9-$1.9 to non-ETH chains.

How you make money on Multichain

You can earn a portion of all bridge fees by staking MULTI to receive veMULTI. veMULTI is the first tradable non-fungible token (NFT) that is the governance asset for the multiDAO and accrues rewards on a weekly basis. The current proposal distributes 45% of quarterly bridge fees as rewards every quarter (paid in USDC). The maximum lock-up time for veMULTI is four years; the longer you lock, the more benefits you receive.